Economics of Convenience

Economic reforms a term once considered a game changer for the country is now reduced to a rhetoric, used by all the political parties for there advantage, to win the educated middle-class electorate and then to disown it, during the tenure of the Non Gandhi congress prime minister P.V Narasimha Rao, India transformed it self by breaking the bondages of the license Raj, led by the legendary finance minister Manmohan Singh, India opened its doors to the world.

With the demographic advantage, a large English speaking intelligent population, India started evolving as the software and BPO HUB for the world, but the real differentiator was the youth of the country, ambitious and sharp, they quickly covered the technological gap of decades in a couple of years and started leading in the software space.

But this remained an isolated bright spot in the otherwise measurable economic track record of the country, the political class of the country which never had any ambition to really transform the country, to utilise its wast natural and human resources, they seriously lack strategic thinking.

In India economic policies are made to appease the electorate, the legendary election slogan given by the candidate Modi which was “Achhe Din Ayenge” or great time to come, is a spectacular example of the hypocrisy as the economy is in a tailspin since Modi became the PM.

I recently read an article in Bloomberg titled “Pakora or Toyota” which clearly depicts the psych of the Indian policy makers, the cars are taxed @ 50%, equivalent to tobacco and alcohol, in the last one week Toyota announced halt in Indian investment and Harley Davidson decided to wind up.

Why dose the policy makers make such illogical policies in the first place? well the answer lies in the Voting pattern, about 40% of the total electorate always give the elections a miss, the rest 60% are the poorest of the poor, illetrate and some section of the middle class populations, 90% of the voters decide there votes on the basis of Cast, religion and freebies they will get if they vote for a particular party.

If you follow the election manifesto of the political parties, none would give structural reforms (again a cliche’) any space in it, they will throw a buffet of freebies, including Free 2 Wheelers, Free Laptops, One of the national parties announced that if they won the elections, they will give every unemployed men and women Rs.7000 (10$) a month, now preposterous as it was, thankfully voters were matured enough to call the bluff and the economy was saved.

One thing that I know for sure is the fact that Indians are very enterprising and the 2.5 trillion economy was built not because of the leaders but despite them. The current state of politics which takes from the competent, hard working and aspirational gives to the incompetent and callous, is not sustainable.

But aren’t the aspirational middle class also equally guilty for the currant state of the politics as they just don’t vote and leave there future in the hands of the goons (As many as 50% of legislatures or the member of parliament have serious criminal cases pending against them).

We often call politics a gutter or a Sewage, but even a garden of Roses, if neglected will turn into a barren and futile piece of land, just imagine what’s at stake if we choose to ignore our country and keep handing it over to the criminals and corrupt.



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